Federal Judge Throws Out Westchester Landlord Group’s Case Against Cuomo’s COVID Eviction Ban

John Jordan | June 2020

Last month, Gov. Andrew Cuomo extended the Executive Order placing a moratorium on residential and commercial leases until Aug. 20.

WHITE PLAINS—In a 37-page ruling, U.S. District Court Judge C.J. McMahon denied a request by a group of Westchester County residential landlords to impose a temporary restraining order on Gov. Andrew Cuomo’s Executive Order that extended a moratorium on evictions of commercial and residential tenants due to the coronavirus pandemic until Aug. 20, 2020.

The three litigants—Elmsford Apartment Associates, LLC, 36 Apartment Associates, LLC and 66 Apartment Associates, LLC own properties in Elmsford, Port Chester and Yonkers—filed suit on May 25 in U.S. District Court in White Plains seeking a temporary restraining order and summary judgement on the litigation contesting the moratorium extension that allows tenants to temporarily apply their security deposit funds to rents due and owing—provided the tenants replenish those funds at a later date.

The Executive Order also temporarily prohibits landlords from initiating eviction proceedings against tenants who are facing financial hardship due to the pandemic. The original Executive Order went into effect on March 20. The Executive Order, issued on May 7, extended the prohibition of residential and commercial evictions from June 20 for another 60 days until Aug. 20, 2020.

Judge McMahon denied the Westchester landlord group’s multiple arguments, including its claim that the moratorium constituted the state’s physical and regulatory “taking” of the properties and granted the state summary judgement and dismissed the case.

“As long as the order is in place, tenants will continue to accrue arrearages, which the landlord will be able to collect with interest once the Order has expired,” Judge McMahon stated in his June 29th ruling. “Furthermore, landlords will regain their ability to evict tenants once the Order expires. Since EO 202.28 is temporary on its face, and does not disturb the landlords’ ability to vindicate their property rights, the Order is one more example of “government regulation of the rental relationship [that] does not constitute a physical taking.”

The judge also took on the group’s contention that the eviction extension order violates its due process rights.

“First, they can still initiate eviction proceedings against the tenants who are not facing financial hardship but who have chosen not to pay their rent. And, second, they will be able to move against their other tenants after August 19,” the judge stated. “No case says that ‘a meaningful time’ means as soon as a cause of action accrues—especially where, as in New York, the filing of a summary proceeding is but the first step in what often takes years to accomplish, which is the ultimate eviction of a tenant. Therefore, the delay embodied mandated by the Order does not deny the Plaintiffs a meaningful opportunity to be heard.”

In a report previously published in Real Estate In-Depth, the three litigants were not fully identified in the court action or by their attorney Mark A. Guterman, a partner in the White Plains-based law firm Lehrman, Lehrman & Guterman, LLP.

In court papers, Elmsford Apartment Associates is described as the owner of rental properties containing a combined 29 units at 7 Paulding St. and 37 North Hillside Ave. in Elmsford. The entity 36 Apartment Associates is the fee owner of residential rental properties at 344 Irving Ave., 350 Irving Ave., 171 Rectory St., 42 Arnett St. and 58 Prospect St. in Port Chester. The five properties contain a total of 36 residential rental units. The remaining litigant, 66 Apartment Associates is the fee owner of 45 condominium units at the Park Crest West Condominium at 66 Caryle Ave. in Yonkers.

“The order has given carte blanche to tenants to withhold rent without immediate repercussion,” the plaintiffs charged in court papers.

Guterman in a telephone interview with Real Estate In-Depth prior to the court ruling, said, “With the (court) filing we hope to get the attention of the governor. We don’t want wholesale eviction of tenants, nobody wants that. But, what we want principally is that the rights of the landlords under their leases and under the law be respected.”

He added, “There is no other industry in which private parties are told you bear the burden of society and we the government are not going to help you out.”

While citizens and other businesses can make applications for COVID-19-related relief, the landlord’s tax and other business obligations remain intact. “It’s not fair, it’s not constitutional,” Guterman charged.

John Jordan
Editor, Real Estate In-Depth